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What changed in ALPHA PRO TECH LTD's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ALPHA PRO TECH LTD's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+162 added−151 removedSource: 10-K (2026-03-11) vs 10-K (2025-03-12)

Top changes in ALPHA PRO TECH LTD's 2025 10-K

162 paragraphs added · 151 removed · 114 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeDisposable Protective Apparel The Disposable Protective Apparel segment consists of a complete line of disposable protective garments (shoecovers, bouffant caps, coveralls, gowns, frocks and lab coats), as well as face masks and face shields. 4 Our goal in the design and manufacture of all our disposable protective garments is to keep the wearer cool, clean and comfortable and to provide the right level of protection for the wearer and the wearer’s environment.
Biggest changeOur goal in the design and manufacture of all our disposable protective garments is to keep the wearer cool, clean and comfortable and to provide the right level of protection for the wearer and the wearer’s environment. To achieve this, we offer a comprehensive selection of materials and garment designs to meet a wide range of application requirements.
None of our employees are subject to collective bargaining agreements. We have had no labor-related work stoppages, and we believe that our relations with our employees are good. 7 Workplace Health and Safety The health, safety, and wellness of our employees is a priority in which we have always invested, and we will continue to do so.
None of our employees are subject to collective bargaining agreements. We have had no labor-related work stoppages, and we believe that our relations with our employees are good. Workplace Health and Safety The health, safety, and wellness of our employees is a priority in which we have always invested, and we will continue to do so.
Our executive offices are located at 53 Wellington Street East, Aurora, Ontario, Canada L4G 1H6, and our telephone number is (905) 479-0654. Our website is located at www.alphaprotech.com. The Company continued to qualify as a smaller reporting company at the measurement date for determining such qualification during 2024.
Our executive offices are located at 53 Wellington Street East, Aurora, Ontario, Canada L4G 1H6, and our telephone number is (905) 479-0654. Our website is located at www.alphaprotech.com. The Company continued to qualify as a smaller reporting company at the measurement date for determining such qualification during 2025.
According to the disclosure requirements for smaller reporting companies, the Company has included consolidated balance sheets as of December 31, 2024 and 2023, and consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2024.
According to the disclosure requirements for smaller reporting companies, the Company has included consolidated balance sheets as of December 31, 2025 and 2024, and consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2025.
As of December 31, 2024 2023 Long-lived assets, net by geographic region United States $ 7,325,000 $ 4,340,000 International 1,195,000 1,247,000 Consolidated total long-lived assets, net $ 8,520,000 $ 5,587,000 MANUFACTURING Our wholly-owned subsidiary, Alpha ProTech Engineered Products, Inc., manufactures and distributes a line of construction weatherization products for the Building Supply segment, comprised primarily of housewrap, housewrap accessories, synthetic roof underlayment and synthetic roof underlayment accessories.
As of December 31, 2025 2024 Long-lived assets, net by geographic region United States $ 6,953,000 $ 7,325,000 International 1,281,000 1,195,000 Consolidated total long-lived assets, net $ 8,234,000 $ 8,520,000 MANUFACTURING Our wholly-owned subsidiary, Alpha ProTech Engineered Products, Inc., manufactures and distributes a line of construction weatherization products for the Building Supply segment, comprised primarily of housewrap, housewrap accessories, synthetic roof underlayment and synthetic roof underlayment accessories.
We are marketing an N-95 Particulate Respirator face mask that meets the Occupational Safety and Health Administration (OSHA) respirator guidelines and has been approved by the National Institute for Occupational Safety and Health (NIOSH). This product is designed to help prevent the inhalation of the tuberculosis bacteria.
We produce and sell an N-95 Particulate Respirator face mask that meets the Occupational Safety and Health Administration (“OSHA”) respirator guidelines and has been approved by the National Institute for Occupational Safety and Health (“NIOSH”). This product is designed to help prevent the inhalation of the tuberculosis bacteria.
HUMAN CAPITAL As of March 1, 2025, we had 130 full-time employees and one part-time employee, including 21 employees at our principal executive office in Aurora, Ontario, Canada; 42 employees at our Disposable Protective Apparel segment facility in Nogales, Arizona; 48 employees at our Building Supply segment facility in Valdosta, Georgia; 18 employees on our sales and marketing team, located in various areas throughout the United States; and 1 employee in China.
HUMAN CAPITAL As of March 2, 2026, we had 122 full-time employees and one part-time employee, including 19 employees at our principal executive office in Aurora, Ontario, Canada; 39 employees at our Disposable Protective Apparel segment facility in Nogales, Arizona; 46 employees at our Building Supply segment facility in Valdosta, Georgia; 17 employees on our sales and marketing team, located in various areas throughout the United States; and 1 employee in China.
These products are manufactured in our manufacturing facility in Valdosta, Georgia and through our joint venture in India, as described in more detail below under “Manufacturing.” Our synthetic roof underlayment accessories consist of our new self-adhered TECHNOplus which provides an additional layer of protection and aids in prevention of damage caused by ice dams and wind driven rain, and REX Ultra HT which is designed to deal with roofing’s most demanding installation conditions and high temperature applications.
These products are manufactured in our manufacturing facility in Valdosta, Georgia and through our joint venture in India, as described in more detail below under “Manufacturing.” Our synthetic roof underlayment accessories consist of our self-adhered TECHNOplus which provides an additional layer of protection and aids in prevention of damage caused by ice dams and wind driven rain, and REX Ultra HT which is designed to deal with roofing’s most demanding installation conditions and high temperature applications. 4 Disposable Protective Apparel The Disposable Protective Apparel segment consists of a complete line of disposable protective garments (shoecovers, bouffant caps, coveralls, gowns, frocks and lab coats), as well as face masks and face shields.
To achieve this, we offer a comprehensive selection of materials and garment designs to meet a wide range of application requirements. Our materials are clean and durable and offer the wearer a great comfort level. Our products are offered using proprietary materials such as ChemTech®, BarrierTech®, ComforTech®, AlphaGuard®, GenPro®, UltraGrip™, SafeStep®, MaxGrip®, AquaTrak®, SureGrip®, NuTech® and NaviTrak®.
Our materials are clean and durable and offer the wearer a great comfort level. Our products are offered using proprietary materials such as ChemTech®, BarrierTech®, ComforTech®, AlphaGuard®, GenPro®, UltraGrip™, SafeStep®, MaxGrip®, AquaTrak®, SureGrip®, NuTech® and NaviTrak®.
The Company maintains a variety of programs to reduce and eliminate injuries and promote safety and regularly measures progress against those programs. These programs promote personal responsibility for workplace safety and encourage associates to set a meaningful example as safety ambassadors.
The Company maintains a variety of programs to reduce and eliminate injuries and promote safety and regularly measures progress against those programs.
International sales include sales primarily to Canada and Costa Rica during 2024 and Canada and Japan in 2023. All sales are in U.S. dollars. For the years ended December 31, 2024 and 2023, the Company did not generate sales from any single country, except the United States, that were significant to the Company’s consolidated net sales.
All sales are in U.S. dollars. For the years ended December 31, 2025 and 2024, the Company did not generate sales from any single country, except the United States, that were significant to the Company’s consolidated net sales. The following table summarizes the locations of the Company’s long-lived assets by geographic region as of December 31, 2025 and 2024.
Years Ended December 31, 2024 2023 Net sales by geographic region United States $ 57,211,000 $ 60,882,000 International 629,000 350,000 Consolidated net sales $ 57,840,000 $ 61,232,000 Net sales by geographic region are based on the countries in which our customers are located.
Years Ended December 31, 2025 2024 Net sales by geographic region United States $ 58,527,000 $ 57,211,000 International 615,000 629,000 Consolidated net sales $ 59,142,000 $ 57,840,000 Net sales by geographic region are based on the countries in which our customers are located. International sales include sales primarily to Canada and Costa Rica during both 2025 and 2024.
We do this by leading with inclusion and empowering everyone to do their best work as their most authentic selves. We are united by our collective purpose and common set of organizational values that are core to our mission and culture.
We are united by our collective purpose and common set of organizational values that are core to our mission and culture.
We also rely on trade secrets and proprietary know-how to maintain and develop our commercial position. The United States patents issued expired on February 4, 2024, and cannot be extended. Trademarks Many of our products are sold under various trademarks and trade names, including Alpha Pro Tech.
The United States patents issued expired in 2024 and cannot be extended. Trademarks Many of our products are sold under various trademarks and trade names, including Alpha Pro Tech and several others listed under “Products” above.
Company Culture We strive to foster a culture where mutual respect, inclusive behavior, and dignity are core to our individual expectations. We remain committed to fostering an inclusive environment in which our differing backgrounds, life experiences, and perspectives join to positively impact the communities in which we live and serve.
We remain committed to fostering an inclusive environment in which our differing backgrounds, life experiences, and perspectives join to positively impact the communities in which we live and serve. We do this by leading with inclusion and empowering everyone to do their best work as their most authentic selves.
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The following table summarizes the locations of the Company’s long-lived assets by geographic region as of December 31, 2024 and 2023.
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INTELLECTUAL PROPERTY Patents and Trade Secrets Until recently, we had ten United States patents relating to several of our products and a United States patent on a method to fold and put on sterile garments. We also rely on trade secrets and proprietary know-how to maintain and develop our commercial position.
Removed
PATENTS AND TRADEMARKS Patents Our policy is to protect our intellectual property rights, products, designs and processes through the filing of patents in the United States and, where appropriate, in Canada and other countries. At present, we have ten United States patents relating to several of our products.
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These programs promote personal responsibility for workplace safety and encourage associates to set a meaningful example as safety ambassadors. 7 Company Culture We strive to foster a culture where mutual respect, inclusive behavior, and dignity are core to our individual expectations.
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In addition, we have a United States patent on a method to fold and put on sterile garments. We believe that our patents may offer a competitive advantage, but there can be no assurance that any patents, issued or in process, will not be circumvented or invalidated.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe laws of other countries may afford little or no effective protection of our technology. We cannot assure you that the steps taken by us will prevent misappropriation of our technology or that agreements entered into for that purpose will be enforceable.
Biggest changeWe cannot assure you that the steps taken by us will prevent misappropriation of our technology or that agreements entered into for that purpose will be enforceable. In addition, litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets and to determine the validity and scope of the proprietary rights of others.
Such changes in tariffs and trade regulations could have a material adverse effect on our financial condition, results of operations and cash flows. Our success depends in part on protection of our intellectual property, and our failure to protect our intellectual property could adversely affect our competitive advantage, our brand recognition and our business.
Such changes in tariffs and trade regulations could have a material adverse effect on our financial condition, results of operations and cash flows. 9 Our success depends in part on protection of our intellectual property, and our failure to protect our intellectual property could adversely affect our competitive advantage, our brand recognition and our business.
Changes in business conditions, pandemics, wars, including the Russian invasion of Ukraine and world sanctions on Russia, Belarus, and related parties, governmental changes, and other factors beyond our control or which we do not presently anticipate could negatively affect our suppliers and contractors, as well as our ability to receive components.
Changes in business conditions, pandemics, wars, including the recent attacks on Iran and escalating conflicts in the Middle East, Russian invasion of Ukraine and world sanctions on Russia, Belarus, and related parties, governmental changes, and other factors beyond our control or which we do not presently anticipate could negatively affect our suppliers and contractors, as well as our ability to receive components.
We are subject to the risk of losing large customers or incurring significant reductions in sales to these customers. We rely on suppliers and contractors, and our business could be seriously harmed if these suppliers and contractors are not able to meet our requirements. We rely on a limited number of suppliers and contractors for the manufacture of our products.
We are subject to the risk of losing large customers or incurring significant reductions in sales to these customers. 8 We rely on suppliers and contractors, and our business could be seriously harmed if these suppliers and contractors are not able to meet our requirements.
If we lose the services of these key suppliers and contractors, or if they are not willing or able to satisfy our requirements, finding substitute suppliers or contractors may be time-consuming and would affect our results of operations in the near term.
We rely on a limited number of suppliers and contractors for the manufacture of our products. If we lose the services of these key suppliers and contractors, or if they are not willing or able to satisfy our requirements, finding substitute suppliers or contractors may be time-consuming and would affect our results of operations in the near term.
The Company may not be able to compete successfully with existing competitors or with new competitors. If we do not compete successfully with respect to these or other companies, it could materially adversely affect our business, results of operations and financial condition. The Company ’ s results are affected by competitive conditions and customer preferences.
If we do not compete successfully with respect to these or other companies, it could materially adversely affect our business, results of operations and financial condition. The Company’s results are affected by competitive conditions and customer preferences.
General Risks Global economic conditions could adversely affect the Company ’ s business and financial results. Unfavorable economic conditions, including the impact of recessions and general economic downturns in the United States and throughout the world, may negatively affect the Company’s business and financial results.
Unfavorable economic conditions, including the impact of recessions and general economic downturns in the United States and throughout the world, may negatively affect the Company’s business and financial results.
In addition, our product development and distribution activities are subject to inherent risks related to natural disasters, including earthquakes such as the one that occurred near our facility in Utah during 2020, which could disrupt our supply chain and impair our ability to manufacture or sell our products.
In addition, our product development and distribution activities are subject to inherent risks related to natural disasters, including earthquakes such as the one that occurred near our facility in Utah during 2020, which could disrupt our supply chain and impair our ability to manufacture or sell our products. 10 General Risks Global economic conditions could adversely affect the Company ’ s business and financial results.
While we have not experienced any material losses related to cyber-attacks or information security breaches to date, any such event could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations and damage to the Company’s reputation, which could adversely affect the Company’s business. 11 Uncertainties with respect to the development, deployment, and use of artificial intelligence in our business and products may result in harm to our business and reputation.
While we have not experienced any material losses related to cyber-attacks or information security breaches to date, any such event could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations and damage to the Company’s reputation, which could adversely affect the Company’s business.
We also work with vendors that incorporate artificial intelligence tools into their offerings and the providers of these artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection. Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action, or brand and reputational harm.
We also work with vendors that incorporate artificial intelligence tools into their offerings and the providers of these artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection.
In addition, any disruption or failure in the AI functionality we have incorporated or may in the future incorporate into our business activities, products or services could adversely impact our business or result in delays or errors in our offerings.
For example, AI algorithms may be flawed or may be based on datasets that are biased or insufficient. In addition, any disruption or failure in the AI functionality we have incorporated or may in the future incorporate into our business activities, products or services could adversely impact our business or result in delays or errors in our offerings.
These agreements may be breached or we may not have adequate remedies for any breach. In addition, despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our proprietary information without authorization or to develop similar information independently. Policing unauthorized use of intellectual property is difficult.
In addition, despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our proprietary information without authorization or to develop similar information independently. Policing unauthorized use of intellectual property is difficult. The laws of other countries may afford little or no effective protection of our technology.
The Company ’ s future results may be affected by various legal and regulatory proceedings and legal compliance risks. From time to time, the Company is subject to certain legal and regulatory proceedings in the ordinary course of business and otherwise.
Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action, or brand and reputational harm. 11 The Company’s future results may be affected by various legal and regulatory proceedings and legal compliance risks. From time to time, the Company is subject to certain legal and regulatory proceedings in the ordinary course of business and otherwise.
Our operating results could be negatively affected by the loss of revenue from one or more large customers. Our customers are not contractually obligated to purchase any fixed quantities of products, and they may stop placing orders with us at any time.
Our customers are not contractually obligated to purchase any fixed quantities of products, and they may stop placing orders with us at any time.
Global climate change could result in certain types of natural disasters occurring more frequently or with more intense effects.
Climate change and natural disasters or other events beyond our control could disrupt our business and result in loss of revenue or higher expenses. Global climate change could result in certain types of natural disasters occurring more frequently or with more intense effects.
Furthermore, as the joint venture is in a foreign country, social and economic events in that country could also affect the value of our investment and our ability to conduct business in that country. 8 Risks Related to Our Industry The loss of any large customer or a reduction in orders from any large customer could reduce our net sales and harm our operating results.
Furthermore, as the joint venture is in a foreign country, social and economic events in that country could also affect the value of our investment and our ability to conduct business in that country.
Of particular concern are developing countries, such as China and India, where the laws, courts, and administrative agencies may not protect our intellectual property rights as fully as in the United States. 9 We enter into confidentiality and non-disclosure of intellectual property agreements with certain of our employees, consultants and vendors and generally control access to and distribution of our proprietary information.
Of particular concern are developing countries, such as China and India, where the laws, courts, and administrative agencies may not protect our intellectual property rights as fully as in the United States.
We may incur costs in connection with any obligations to transition away from the usage of PFAS-containing products, to dispose of PFAS-containing waste or to remediate any PFAS contamination, which could have a negative effect on our financial position, results of operations and cash flows. 10 In addition, some environmental laws impose liability, sometimes without fault, for investigating and/or cleaning up contamination on, or emanating from, properties currently or formerly owned, leased or operated by a person, as well as for damages to property or natural resources and personal injury arising out of such contamination.
In addition, some environmental laws impose liability, sometimes without fault, for investigating and/or cleaning up contamination on, or emanating from, properties currently or formerly owned, leased or operated by a person, as well as for damages to property or natural resources and personal injury arising out of such contamination.
The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, including in the areas of intellectual property, cybersecurity and privacy and data protection. Compliance with new or changing laws, regulations or industry standards relating to AI may impose significant costs and may limit our ability to develop, deploy or use AI technologies.
Compliance with new or changing laws, regulations or industry standards relating to AI may impose significant costs and may limit our ability to develop, deploy or use AI technologies.
Many of our competitors are more established, benefit from greater market recognition and have substantially greater financial, development, manufacturing and marketing resources than we have. Additionally, the Company’s competitors may adopt new technologies and technological advancements, such as using artificial intelligence and machine learning to pursue new products and approaches more quickly, successfully and effectively than the Company.
Additionally, the Company’s competitors may adopt new technologies and technological advancements, such as using artificial intelligence and machine learning to pursue new products and approaches more quickly, successfully and effectively than the Company. The Company may not be able to compete successfully with existing competitors or with new competitors.
The development, adoption, and use of AI technologies are still in their early stages and ineffective or inadequate AI development or deployment practices could result in unintended consequences. For example, AI algorithms may be flawed or may be based on datasets that are biased or insufficient.
As with many innovations, AI presents risks and challenges that could adversely impact our business. The development, adoption, and use of AI technologies are still in their early stages and ineffective or inadequate AI development or deployment practices could result in unintended consequences.
The extent and strength of the sanctions are still developing, and the corresponding effect on the Company remains uncertain. In addition, the war in Ukraine has further increased existing global supply chain, logistics, and inflationary challenges. Climate change and natural disasters or other events beyond our control could disrupt our business and result in loss of revenue or higher expenses.
The extent and strength of the sanctions are still developing, and the corresponding effect on the Company remains uncertain. In addition, the war in Ukraine, and the recent attacks on Iran and escalating conflicts in the Middle East, have further increased existing global supply chain, logistics, and inflationary challenges.
Our industry is highly competitive, which may negatively affect our ability to grow our customer base and generate sales. The markets for our products are intensely competitive. We currently experience competition from numerous companies in each of the markets in which we participate.
Litigation may result in substantial costs and diversion of resources, which could have a material adverse effect on our business, results of operations and financial condition. Our industry is highly competitive, which may negatively affect our ability to grow our customer base and generate sales. The markets for our products are intensely competitive.
We are in the initial stages of incorporating artificial intelligence (“AI”) into our business activities and our product and service offerings. As with many innovations, AI presents risks and challenges that could adversely impact our business.
Uncertainties with respect to the development, deployment, and use of artificial intelligence in our business and products may result in harm to our business and reputation. We are in the initial stages of incorporating artificial intelligence (“AI”) into our business activities and our product and service offerings.
Tariff policies and potential countermeasures could increase our costs and disrupt our global supply chain, which could negatively impact the results of our operations. On February 1, 2025, President Trump announced the imposition of additional substantial tariffs on imports from various countries, including China, Canada and Mexico, and the subject countries indicated their intention to impose counter measures.
Tariff policies and potential countermeasures could continue to increase our costs and disrupt our global supply chain, which could negatively impact the results of our operations.
Tariffs may increase our manufacturing costs and make our products less competitive than those of our competitors whose inputs are not subject to these tariffs. Further, it is possible that government policy changes and related uncertainty about policy changes could increase market volatility and currency exchange rate fluctuations.
In response to these tariffs, some foreign countries, including China, have instituted retaliatory tariffs, which could impact our products, while other countries have threatened retaliatory tariffs on certain U.S. products. Further, it is possible that government policy changes and related uncertainty about policy changes could increase market volatility and currency exchange rate fluctuations.
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Under the announced measures, a 25% tariff will be applied to certain products from Canada and Mexico, while a 10% tariff will be imposed on certain imports from China. If implemented, these tariffs and countermeasures could increase the cost of raw materials and components necessary for our operations, disrupt our global supply chain and create additional operational challenges.
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Risks Related to Our Industry The loss of any large customer or a reduction in orders from any large customer could reduce our net sales and harm our operating results. Large purchases by a relatively limited number of customers have accounted for a significant portion of our revenue.
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In addition, litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets and to determine the validity and scope of the proprietary rights of others. Litigation may result in substantial costs and diversion of resources, which could have a material adverse effect on our business, results of operations and financial condition.
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For example, sales to one customer represented 24%, and 20% of our total revenue, and sales to another customer represented 15% and 15% of our total revenue for the years ended December 31, 2025 and 2024, respectively.
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Any such liability could have a material adverse effect on our financial condition and results of operations. By way of example, but not limitation, governmental authorities in the U.S. and in other jurisdictions are increasingly focused on potential contamination resulting from the use of so-called “forever chemicals,” most notable at present are per- and polyfluoroalkyl, substances (PFAS).
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We have experienced unpredictability in the timing of orders from our large customers primarily due to the overall complexity of these large orders and changes in demand specific to these customers.
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Products containing PFAS have been used in manufacturing, industrial, and consumer applications over many decades, including in some of our engineered materials and components, and are virtually ubiquitous in parts of the environment. Until recently, these substances were largely unregulated. Nevertheless, over the last few years, PFAS regulation has been evolving rapidly. In 2023, the U.S.
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We sometimes provide more favorable terms and conditions to large customers than we typically do to other customers, which may reduce gross margins for the period in which such sales occur. In addition, our largest customer accounted for 53% and 36% of our accounts receivable as of December 31, 2025 and 2024, respectively.
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EPA issued a new rule under the Toxic Substances Control Act, requiring manufacturers and importers of PFAS to submit additional reporting information about production volumes, industrial uses, byproducts, worker exposure, and disposal.
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Trade policies and disputes have resulted in increased tariffs, trade barriers, and other protectionist measures, which have caused and will continue to cause increases in our manufacturing costs, may make our products less competitive, may reduce demand for our products, may limit our ability to sell to certain customers, have disrupted and may continue to disrupt our ability to procure components or raw materials, and may impede or slow the movement of our goods across borders.
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In 2023, certain EU member states submitted a proposal to the European Chemicals Agency calling for the phase out of the manufacture, import, sale, and use of PFAS substances beginning in late 2025. In 2024, among other things, U.S.
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Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to, certain markets.
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EPA issued new regulations regarding PFAS in drinking water, PFAS reporting obligations under Toxic Substances Control Act, and designated two PFAS chemicals (Perfluorooctanoic acid and Perfluorooctane sulfonic acid) as hazardous substances under Comprehensive Environmental Response, Compensation, and Liability Act.
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The U.S. has significantly increased tariffs on products imported from China into the U.S. and implemented new tariffs on imports into the U.S. from other countries, particularly from India, Canada, Mexico, and Vietnam.
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While PFAS regulation continues to advance at the federal level and in many states, the full scope of such regulation is still being developed. In some cases, PFAS compounds are regulated at, or even below, the ability of current technology to detect their presence, making remediation difficult and complex.
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We enter into confidentiality and non-disclosure of intellectual property agreements with certain of our employees, consultants and vendors and generally control access to and distribution of our proprietary information. These agreements may be breached or we may not have adequate remedies for any breach.
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We may therefore incur costs in connection with any obligations to transition away from the usage of PFAS-containing products, to dispose of PFAS-containing waste or to remediate any PFAS contamination, which could have a negative effect on our financial position, results of operations and cash flows.
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We currently experience competition from numerous companies in each of the markets in which we participate. Many of our competitors are more established, benefit from greater market recognition and have substantially greater financial, development, manufacturing and marketing resources than we have.
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Any such liability could have a material adverse effect on our financial condition and results of operations.
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The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, including in the areas of intellectual property, cybersecurity and privacy and data protection. At the federal level, in January 2025, the Trump administration rescinded an executive order relating to the safe and secure development of AI technologies that was previously implemented by the Biden administration.
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The Trump administration then issued a new executive order that, among other things, requires certain agencies to develop and submit to the president action plans to “sustain and enhance America’s global AI dominance,” and to specifically review and, if possible, rescind rulemaking taken pursuant to the rescinded Biden executive order.
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Additionally, in December 2025, the Trump administration’s “Ensuring a National Policy Framework for Artificial Intelligence” Executive Order was signed. This order calls for federal standards and legislation that would preempt conflicting state AI regulations and create a federal litigation task force focused on challenging state AI laws in court.
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The Trump administration may continue to rescind other existing federal orders and/or administrative policies relating to AI technologies or may implement new executive orders and/or other rule making relating to AI technologies in the future.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo identify and assess material risks from cybersecurity threats, our enterprise risk management program considers cybersecurity threat risks alongside other company risks as part of our overall risk assessment process. Our enterprise risk professionals collaborate with subject matter specialists, as necessary, to gather insights for identifying and assessing material cybersecurity threat risks, their severity, and potential mitigations.
Biggest changeWe have implemented several cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage such material risks. 12 To identify and assess material risks from cybersecurity threats, our enterprise risk management program considers cybersecurity threat risks alongside other company risks as part of our overall risk assessment process.
In the last fifteen fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial. This includes penalties and settlements, of which there were none. 13 Cybersecurity Governance Cybersecurity is an important part of our enterprise risk management program and an area of increasing focus for our Board and management.
In the last fifteen fiscal years, we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents were immaterial. This includes penalties and settlements, of which there were none. Cybersecurity Governance Cybersecurity is an important part of our enterprise risk management program and an area of increasing focus for our Board and management.
These risks include, among other things, operational disruption; intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy or security laws and other litigation and legal risk; and reputational risks. We have implemented several cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage such material risks.
These risks include, among other things, operational disruption; intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy or security laws and other litigation and legal risk; and reputational risks.
Members of the Audit Committee are also encouraged to regularly engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management process.
In such sessions, the Audit Committee generally receives materials regarding current and emerging material cybersecurity threat risks and the company’s ability to mitigate those risks, and discusses such matters with our IT Manager. 13 Members of the Audit Committee are also encouraged to regularly engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management process.
We employ a range of tools and services, including regular network and endpoint monitoring, vulnerability assessments, penetration testing, to inform our professionals’ risk identification and assessment.
Our enterprise risk professionals collaborate with subject matter specialists, as necessary, to gather insights for identifying and assessing material cybersecurity threat risks, their severity, and potential mitigations. We employ a range of tools and services, including regular network and endpoint monitoring, vulnerability assessments, penetration testing, to inform our professionals’ risk identification and assessment.
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In such sessions, the Audit Committee generally receives materials if necessary, including current and emerging material cybersecurity threat risks and describing the company’s ability to mitigate those risks, and discusses such matters with our IT Manager.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company is subject to various pending and threatened litigation actions in the ordinary course of business.
Biggest changeItem 3. Legal Proceedings. The Company is subject to various pending and threatened litigation actions in the ordinary course of business.
Item 4. Mine Safety Disclosures. N/A 14 PART II
Item 4. Mine Safety Disclosures. N/A PART II
Removed
Item 3. Legal Proceedings. On June 7, 2022, the Company filed a lawsuit (the “Lawsuit”) in Utah naming as defendants the vendors from which the Company ordered equipment for its facility in Utah (collectively the “Defendants”). The Lawsuit relates to certain equipment ordered from Defendants and paid for by the Company, which Defendants never delivered.
Removed
In the Lawsuit the Company is seeking the following relief: compensatory damages in the amount $490,000, representing the money the Company paid for the machines it never received, lost profits in the form of mask sales it could have made if Defendants had delivered the machines on the promised date, and other monetary and equitable relief.
Removed
In 2022, the Company wrote off the $490,000 balance of the deposit paid for the equipment, pending any recovery in the Lawsuit. As of the date hereof, no counterclaims have been asserted against the Company. The Company believes there would not be any meritorious claims against the Company in the Lawsuit.
Removed
The final outcome of the Lawsuit, including the potential amount of any recovery for the Company’s claims, is uncertain. Any potential recovery represents a gain contingency in accordance with ASC 450, Contingencies, that has not been recorded as the matter was not resolved as of December 31, 2024. Any recovery will be recorded when received.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (1) October 1 - 31, 2024 0 $ 0.00 0 November 1 - 30, 2024 57,100 5.36 57,100 December 1 - 31, 2024 78,900 5.19 78,900 136,000 5.26 136,000 (1) On December 23, 2024, the Company announced that the Board of Directors had authorized a $2,000,000 expansion of the Company’s existing share repurchase program.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) October 1 - 31, 2025 62,800 $ 4.71 62,800 $ 1,813,000 November 1 - 30, 2025 41,900 4.59 41,900 1,619,000 December 1 - 31, 2025 48,300 4.56 48,300 1,397,000 153,000 4.63 153,000 (1) On June 27, 2025, the Company announced that the Board of Directors had authorized a $2,000,000 expansion of the Company’s existing share repurchase program.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS We did not sell any unregistered equity securities during the periods covered by this Annual Report on Form 10-K. Item 6. (Reserved) N/A
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS We did not sell any unregistered equity securities during the periods covered by this Annual Report on Form 10-K.
All of the shares included in this table were purchased pursuant to this program. Since the inception of the share repurchase program in 1999, the Company has authorized the repurchase of $57,402,000 of common stock, of which $2,742,000 was available for repurchase as of December 31, 2024. The stock repurchase plan expires on December 15, 2026.
All of the shares included in this table were purchased pursuant to this program. Since the inception of the share repurchase program in 1999, the Company has authorized the repurchase of $59,402,000 of common stock, of which $1,397,000 was available for repurchase as of December 31, 2025. The stock repurchase plan expires on December 15, 2026.
The Board of Directors’ current policy is not to pay dividends but rather to use available funds to repurchase common shares in accordance with the Company’s repurchase program and to fund the continued development and growth of the Company. Consequently, the Company currently has no plans to pay cash dividends in the foreseeable future.
The Board of Directors’ current policy is not to pay dividends but rather to use available funds to repurchase common shares in accordance with the Company’s repurchase program and to fund the continued development and growth of the Company.
Item 5. Market For Registrant ’ s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.
Item 5. Market For Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.
MARKET INFORMATION The Company’s common stock trades on the NYSE American (formerly the NYSE MKT, the NYSE Amex and the American Stock Exchange) (the “NYSE American”) under the symbol “APT.” As of February 28, 2025, the Company’s common stock was held by 89 shareholders of record and approximately 12,437 beneficial owners.
MARKET INFORMATION The Company’s common stock trades on the NYSE American (formerly the NYSE MKT, the NYSE Amex and the American Stock Exchange) (the “NYSE American”) under the symbol “APT.” As of March 1, 2026, the Company’s common stock was held by 79 shareholders of record and approximately 10,800 beneficial owners.
ISSUER PURCHASES OF EQUITY SECURITIES The following table sets forth purchases made by or on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18 (a)(3) of the Securities Exchange Act of 1934, during the fourth quarter of 2024.
Consequently, the Company currently has no plans to pay cash dividends in the foreseeable future. 14 ISSUER PURCHASES OF EQUITY SECURITIES The following table sets forth purchases made by or on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18 (a)(3) of the Securities Exchange Act of 1934, during the fourth quarter of 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+32 added−20 removed31 unchanged
Biggest changeNet income for the year ended December 31, 2024, was $3,929,000 compared to net income of $4,189,000 for 2023, representing a decrease of $261,000, or 6.2%. The net income decrease between 2024 and 2023 was due to a decrease in income before provision for income taxes of $405,000, partially offset by a decrease in provision for income taxes of $145,000.
Biggest changeThe net income decrease between 2025 and 2024 was primarily due to a decrease in other income of $741,000 and an increase in provision for income taxes of $47,000, partially offset by an increase in income from operations of $390,000. The other income decrease of $741,000, the majority of which is not taxable, negatively impacted our net income in 2025.
The resulting foreign currency translation gains or losses are deferred as AOCL and reclassified to earnings only upon sale or liquidation of that business. 16 Leases: We determine if an arrangement is a lease at its inception. Operating leases are included as right-of-use (“ROU”) assets and lease liabilities on our consolidated balance sheet.
The resulting foreign currency translation gains or losses are deferred as AOCL and reclassified to earnings only upon sale or liquidation of that business. Leases: We determine if an arrangement is a lease at its inception. Operating leases are included as right-of-use (“ROU”) assets and lease liabilities on our consolidated balance sheet.
We believe that our current cash balance and expected cash flow from operations will be sufficient to satisfy our projected working capital and planned capital expenditures for the foreseeable future. Related Parties During 2024 and 2023, the Company had no related party transactions, other than the Company’s transactions with its non-consolidated affiliate, Harmony.
We believe that our current cash balance and expected cash flow from operations will be sufficient to satisfy our projected working capital and planned capital expenditures for the foreseeable future. Related Parties During 2025 and 2024, the Company had no related party transactions, other than the Company’s transactions with its non-consolidated affiliate, Harmony.
The Company has determined that, as of December 31, 2024, it had no material contract assets, and concluded that its contract liabilities (primarily rebates) had the right of offset against customer receivables. Sales Returns, Rebates and Allowances: Sales revenues are reduced for any anticipated sales returns, rebates and allowances based on historical experience.
The Company has determined that, as of December 31, 2025, it had no material contract assets, and concluded that its contract liabilities (primarily rebates) had the right of offset against customer receivables. Sales Returns, Rebates and Allowances: Sales revenues are reduced for any anticipated sales returns, rebates and allowances based on historical experience.
Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions, including, without limitation, our expected orders, new products, production levels and sales in 2025, and other information that is not historical information.
Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions, including, without limitation, our expected orders, new products, production levels and sales in 2026, and other information that is not historical information.
Our stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value of such options. In 2024 and 2023, we recorded $463,000 and $170,000, respectively, in compensation expense for share-based awards. OVERVIEW Alpha Pro Tech is in the business of protecting people, products and environments.
Our stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value of such options. In 2025 and 2024, we recorded $540,000 and $463,000, respectively, in compensation expense for share-based awards. OVERVIEW Alpha Pro Tech is in the business of protecting people, products and environments.
In 2024 and 2023, we recorded approximately $416,000 and $292,000, respectively, in write-downs of inventory. Foreign currency translation: Our unconsolidated affiliate operations are in India, so U.S. GAAP requires the Company to adjust the value of its investment for changes in foreign currency exchange rates.
In 2025 and 2024, we recorded approximately $384,000 and $416,000, respectively, in write-downs of inventory. Foreign currency translation: Our unconsolidated affiliate operations are in India, so U.S. GAAP requires the Company to adjust the value of its investment for changes in foreign currency exchange rates.
As of December 31, 2024, and 2023, the Company had recorded an allowance for credit losses on accounts receivable of $35,000 for both periods respectively. Inventories: Inventories include freight-in, materials, labor and overhead costs and are stated at the lower of cost or net realizable value. Allowances are recorded for slow-moving, obsolete or unusable inventory.
As of December 31, 2025 and 2024, the Company had recorded an allowance for credit losses on accounts receivable of $46,000 and $35,000 respectively. Inventories: Inventories include freight-in, materials, labor and overhead costs and are stated at the lower of cost or net realizable value. Allowances are recorded for slow-moving, obsolete or unusable inventory.
If new tariffs or trade restrictions are imposed, we may need to adjust our pricing, increase inventory levels, or seek alternative suppliers, any of which could materially affect our revenue, gross margins, and overall financial performance RESULTS OF OPERATIONS The following table sets forth certain operational data as a percentage of sales for the years indicated: 2024 2023 Net sales 100.0 % 100.0 % Gross profit 39.6 % 37.3 % Selling, general and administrative expenses 32.2 % 29.0 % Income from operations 6.0 % 6.7 % Income before provision for income taxes 8.7 % 8.9 % Net income 6.8 % 6.8 % Year ended December 31, 2024 compared to year ended December 31, 2023 Sales.
If new tariffs or trade restrictions are imposed, we may need to adjust our pricing, increase inventory levels, or seek alternative suppliers, any of which could materially affect our revenue, gross margins, and overall financial performance. 17 RESULTS OF OPERATIONS The following table sets forth certain operational data as a percentage of sales for the years indicated: 2025 2024 Net sales 100.0 % 100.0 % Gross profit 38.1 % 39.6 % Selling, general and administrative expenses 30.1 % 32.2 % Income from operations 6.5 % 6.0 % Income before provision for income taxes 7.9 % 8.7 % Net income 6.0 % 6.8 % Year ended December 31, 2025 compared to year ended December 31, 2024 Sales.
The sales mix of the Building Supply segment for the year ended December 31, 2024, was approximately 42% for synthetic roof underlayment, 49% for housewrap and 9% for other woven material. This compared to approximately 42% for synthetic roof underlayment, 47% for housewrap and 11% for other woven material for the year ended December 31, 2023.
The sales mix of the Building Supply segment for the year ended December 31, 2025, was approximately 38% for synthetic roof underlayment, 51% for housewrap and 11% for other woven material. This compared to approximately 42% for synthetic roof underlayment, 49% for housewrap and 9% for other woven material for the year ended December 31, 2024.
Net cash used in investing activities was $3,776,000 for the year ended December 31, 2024, compared to net cash used in investing activities of $792,000 for 2023. Investing activities for the year ended December 31, 2024 and 2023 consisted primarily of the purchase of property and equipment.
Net cash used in investing activities was $639,000 for the year ended December 31, 2025, compared to net cash used in investing activities of $3,776,000 for 2024. Investing activities for the years ended December 31, 2025 and 2024 consisted primarily of the purchase of property and equipment.
The decreased income from operations was primarily due to an increase in selling, general and administrative expenses of $839,000, partially offset by an increase in gross profit of $104,000 and a decrease in depreciation and amortization expenses of $52,000.
The increased income from operations was primarily due to a decrease in selling, general and administrative expenses of $838,000, partially offset by a decrease in gross profit of $396,000 and an increase in depreciation and amortization expenses of $52,000.
Our synthetic roof underlayment product line primarily includes REX SynFelt®, REX TECHNOply® and TECHNO SB and our synthetic roof underlayment accessories consist of our new self-adhered TECHNOplus and REX Ultra HT. Our housewrap product line primarily consists of REX Wrap®, REX Wrap Plus® and REX™ Wrap Fortis.
Our synthetic roof underlayment product line primarily includes REX SynFelt®, REX TECHNOply® and TECHNO SB and our synthetic roof underlayment accessories consist of our new self-adhered TECHNOplus Ice & Water and REX Hi Temp. Our housewrap product line primarily consists of REX Wrap®, REX Wrap Plus® and REX™ Wrap Fortis.
As of December 31, 2024, we had repurchased a total of 21,242,627 shares of common stock at a cost of approximately $54,778,000 through our repurchase program which commenced in 1999. We retire all stock upon repurchase. Future repurchases are expected to be funded from cash on hand and cash flows from operating activities.
As of December 31, 2025, we had repurchased a total of 21,927,940 shares of common stock at a cost of approximately $58,123,000 through our repurchase program which commenced in 1999. We retire all stock upon repurchase. Future repurchases are expected to be funded from cash on hand and cash flows from operating activities.
Account balances are charged against the allowance when management determines that the probability for collection of an account balance is remote. As of December 31, 2024, 2023, and 2022, the Company had accounts receivable totaling $4,894,000, $6,545,000 and $6,973,000, respectively.
Account balances are charged against the allowance when management determines that the probability for collection of an account balance is remote. As of December 31, 2025 and 2024, the Company had accounts receivable totaling $8,138,000 and $4,894,000, respectively.
The sales mix of the Disposable Protective Apparel segment for the year ended December 31, 2024, was approximately 85% for disposable protective garments, 11% for face masks and 4% for face shields. This sales mix is compared to approximately 88% for disposable protective garments, 9% for face masks and 3% for face shields for the year ended December 31, 2023.
The sales mix of the Disposable Protective Apparel segment for the year ended December 31, 2025, was approximately 90% for disposable protective garments, 6% for face masks and 4% for face shields. This sales mix is compared to approximately 85% for disposable protective garments, 11% for face masks and 4% for face shields for the year ended December 31, 2024.
This decrease in income before provision for income taxes was due to a decrease in income from operations of $683,000, partially offset by an increase in other income of $278,000. Provision for Income Taxes . The provision for income taxes for the year ended December 31, 2024, was $1,091,000, compared to $1,236,000 for 2023.
This decrease in income before provision for income taxes was due to a decrease in other income of $741,000, partially offset by an increase in income from operations of $390,000. Provision for Income Taxes . The provision for income taxes for the year ended December 31, 2025, was $1,138,000, compared to $1,091,000 for 2024.
A bonus amount of $264,000 was accrued for the year ended December 31, 2024, compared to $286,000 for the year ended December 31, 2023. Depreciation and Amortization. Depreciation and amortization expense decreased by $52,000, or 5.6%, to $873,000 for the year ended December 31, 2024, from $925,000 for the year ended December 31, 2023.
A bonus amount of $246,000 was accrued for the year ended December 31, 2025, compared to $264,000 for the year ended December 31, 2024. Depreciation and Amortization. Depreciation and amortization expense increased by $52,000, or 6.0%, to $925,000 for the year ended December 31, 2025, from $873,000 for the year ended December 31, 2024.
We base estimates on past experience and on various other assumptions that are believed to be reasonable under the circumstances. The application of these accounting policies on a consistent basis enables us to provide timely and reliable financial information.
We base estimates on past experience and on various other assumptions that are believed to be reasonable under the circumstances. The application of these accounting policies on a consistent basis enables us to provide timely and reliable financial information. Our significant accounting policies and estimates are more fully described in Note 2 to our consolidated financial statements.
The increase in corporate unallocated expenses was primarily due to increased employee compensation, stock option and restricted stock expenses, reorganization costs, professional fees, insurance expenses and general office expenses. The reorganization costs were incurred in connection with moving our face mask manufacturing facility from Utah to Arizona during 2024.
The decrease in corporate unallocated expenses was primarily due to decreased professional fees, public company expenses, insurance expenses, employee compensation, general office expenses and reorganization. The reorganization costs in 2024 were incurred in connection with moving our face mask manufacturing facility from Utah to Arizona.
We also elected a practical expedient to not separate lease and non-lease components. We did not elect the practical expedient to use hindsight in determining our lease terms or assessing impairment of our ROU assets. As of December 31, 2024, we had $8.7 million in ROU assets and $8.8 million in lease liabilities.
We also elected a practical expedient to not separate lease and non-lease components. We did not elect the practical expedient to use hindsight in determining our lease terms or assessing impairment of our ROU assets.
Income before provision for income taxes for the year ended December 31, 2024, was $5,020,000, compared to income before provision for income taxes of $5,425,000 for 2023, representing a decrease of $405,000, or 7.5%.
Income before Provision for Income Taxes. Income before provision for income taxes for the year ended December 31, 2025, was $4,669,000, compared to income before provision for income taxes of $5,020,000 for 2024, representing a decrease of $351,000, or 7.0%.
The number of days that sales remained outstanding as of December 31, 2024, calculated by using an average of accounts receivable outstanding and annual revenue, was 36 days, compared to 40 days as of December 31, 2023. 20 Inventory increased by $2,602,000, or 12.9%, to $22,733,000 as of December 31, 2024, from $20,131,000 as of December 31, 2023.
The number of days that sales remained outstanding as of December 31, 2025, calculated by using an average of accounts receivable outstanding and annual revenue, was 40 days, compared to 36 days as of December 31, 2024. Inventory increased by $865,000, or 3.8%, to $23,598,000 as of December 31, 2025, from $22,733,000 as of December 31, 2024.
The Building Supply segment decrease during the year ended December 31, 2024, was primarily due to a 6.4% decrease in sales of housewrap, an 8.8% decrease in sales of synthetic roof underlayment and a 28.2% decrease in sales of other woven material compared to the same period of 2023.
The Building Supply segment increase during the year ended December 31, 2025, was primarily due to a 2.3% increase in sales of housewrap and a 28.9% increase in sales of other woven material, partially offset by a 10.6% decrease in sales of synthetic roof underlayment as compared to the same period of 2024.
The decrease in the Building Supply segment expenses was primarily related to decreased employee compensation, travel and insurance expenses. The increase in the Disposable Protective Apparel segment expenses was primarily related to increased employee compensation, marketing and rent expenses.
The decrease in the Building Supply segment expenses was primarily related to decreased employee compensation, commission, general factory and office expenses, and insurance expenses. The increase in the Disposable Protective Apparel segment expenses was primarily related to increased employee compensation, marketing, and sales travel expenses, partially offset by lower rent and utilities and general office and factory expenses.
The decrease in cash from December 31, 2023, was due to cash used in investing activities of $3,776,000 and cash used in financing activities of $3,664,000, partially offset by cash provided by operating activities of $5,698,000.
The decrease in cash from December 31, 2024, was due to cash used in investing activities of $639,000 and cash used in financing activities of $3,379,000, partially offset by cash provided by operating activities of $2,370,000.
This segment increase was due to a 0.8% increase in sales of disposable protective garments and a 43.5% increase in sales of face shields, partially offset by a 34.6% decrease in sales of face masks.
This segment increase was due to a 12.2% increase in sales of disposable protective garments, partially offset by a 13.8% decrease in sales of face shields and a 38.3% decrease in sales of face masks.
As of December 31, 2024, we had $2,742,000 available for stock purchases under our stock repurchase program. During the year ended December 31, 2024, we repurchased 831,000 shares of common stock at a cost of $4,452,000.
As of December 31, 2025, we had $1,397,000 available for stock purchases under our stock repurchase program. During the year ended December 31, 2025, we repurchased 685,313 shares of common stock at a cost of $3,345,000.
Our products are grouped into two business segments: (i) the Building Supply segment, consisting of construction weatherization products, such as housewrap, housewrap accessories, synthetic roof underlayment and synthetic roof underlayment accessories, as well as other woven material; and (ii) the Disposable Protective Apparel segment, consisting of disposable protective garments (including shoecovers, bouffant caps, coveralls, gowns, frocks and lab coats), face masks and face shields. 17 Our target markets include construction, building supply and roofing distributors; companies in pharmaceutical manufacturing, bio-pharmaceutical manufacturing, medical device manufacturing, lab animal research, and high technology electronics manufacturing (which includes the semi-conductor market); and medical and dental distributors.
Our products are grouped into two business segments: (i) the Building Supply segment, consisting of construction weatherization products, such as housewrap, housewrap accessories, synthetic roof underlayment and synthetic roof underlayment accessories, as well as other woven material; and (ii) the Disposable Protective Apparel segment, consisting of disposable protective garments (including shoecovers, bouffant caps, coveralls, gowns, frocks and lab coats), face masks and face shields.
See Note 6 to our consolidated financial statements for more information on our relationship with our non-consolidated affiliate Harmony Plastics Private Limited. New Accounting Standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. These amendments address investor requests for enhanced transparency regarding income tax information.
See Note 6 to our consolidated financial statements for more information on our relationship with our non-consolidated affiliate Harmony Plastics Private Limited. New Accounting Standards In December 2023, the FASB issued ASU 2023-09, Income Taxes (“Topic 740”): Improvements to Income Tax Disclosures to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.
The increase was due to an increase in inventory for the Building Supply segment of $3,961,000, or 56.8%, to $10,931,000, partially offset by a decrease in inventory for the Disposable Protective Apparel segment of $1,359,000, or 10.3%, to $11,802,000. Prepaid expenses decreased by $1,634,000, or 27.2%, to $4,376,000 as of December 31, 2024, from $6,010,000 as of December 31, 2023.
The increase was due to an increase in inventory for the Building Supply segment of 1,898,000, or 17.4%, to $12,829,000, partially offset by a decrease in inventory for the Disposable Protective Apparel segment of $1,033,000, or 8.8%, to $10,769,000. Prepaid expenses decreased by $580,000, or 13.3%, to $3,796,000 as of December 31, 2025, from $4,376,000 as of December 31, 2024.
Net cash provided by operating activities of $5,698,000 for the year ended December 31, 2024 was due to net income of $3,922,000, as adjusted primarily by the following: stock-based compensation expense of $463,000, depreciation and amortization expense of $873,000, equity in income of unconsolidated affiliate of $629,000, gain on sale of assets of $30,000, operating lease asset amortization of $899,000, and increase in deferred income taxes of $61,000, a decrease in accounts receivable of $1,651,000, a decrease in prepaid expenses of $1,635,000, an increase in inventory of $2,602,000, an increase in accounts payable and accrued liabilities of $325,000, and a decrease in lease liabilities of $876,000, all compared to December 31, 2023.
Net cash provided by operating activities of $2,370,000 for the year ended December 31, 2025 was due to net income of $3,531,000, as adjusted primarily by the following: stock-based compensation expense of $540,000, depreciation and amortization expense of $925,000, equity in income of unconsolidated affiliate of $182,000, operating lease asset amortization of $939,000, an increase in deferred income taxes of $176,000, an increase in accounts receivable of $3,244,000, a decrease in prepaid expenses of $580,000, an increase in inventory of $865,000, an increase in accounts payable and accrued liabilities of $863,000, and a decrease in lease liabilities of $893,000, all compared to December 31, 2024.
Special Note Regarding Smaller Reporting Company Status We are filing this Annual Report on Form 10-K as a “smaller reporting company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended) based on our public float (the aggregate market value of our common equity held by non-affiliates of the Company) as of the last business day of our second fiscal quarter of 2024.
These and many other factors could affect the Company’s future operating results and financial condition and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by the Company or on its behalf. 15 Special Note Regarding Smaller Reporting Company Status We are filing this Annual Report on Form 10-K as a “smaller reporting company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended) based on our public float (the aggregate market value of our common equity held by non-affiliates of the Company) as of the last business day of our second fiscal quarter of 2025.
You should read the following discussion and analysis together with our consolidated financial statements and the notes to our consolidated financial statements, which appear elsewhere in this report. 15 Special Note Regarding Forward-Looking Statements Certain information set forth in this Annual Report on Form 10-K contains “forward-looking statements” within the meaning of federal securities laws.
Special Note Regarding Forward-Looking Statements Certain information set forth in this Annual Report on Form 10-K contains “forward-looking statements” within the meaning of federal securities laws.
Revenue Recognition: Net sales includes revenue from products and shipping and handling charges, net of estimates for product returns and any related sales incentives. Our customer contracts have a single performance obligation: transfer control of products to customers. Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring control of products.
As of December 31, 2025, we had $7.8 million in ROU assets and $7.9 million in lease liabilities. 16 Revenue Recognition: Net sales includes revenue from products and shipping and handling charges, net of estimates for product returns and any related sales incentives. Our customer contracts have a single performance obligation: transfer control of products to customers.
The decrease was primarily due to a decrease in depreciation in the Building Supply segment. Income from Operations. Income from operations decreased by $683,000, or 16.5%, to $3,449,000 for the year ended December 31, 2024, compared to $4,132,000 for the year ended December 31, 2023.
The increase was primarily due to an increase in depreciation in the Building Supply segment. 19 Income from Operations. Income from operations increased by $390,000, or 11.3%, to $3,839,000 for the year ended December 31, 2025, compared to $3,449,000 for the year ended December 31, 2024.
Building Supply Segment Building Supply segment sales for the year ended December 31, 2024, decreased by $4,431,000, or 11.0%, to $35,965,000 compared to $40,396,000 for the year ended December 31, 2023.
Building Supply Segment Building Supply segment sales for the year ended December 31, 2025, increased by $66,000, or 0.2%, to $36,031,000 compared to $35,965,000 for the year ended December 31, 2024.
Net income as a percentage of net sales was 6.8% for both years ended December 31, 2024 and 2023. Basic and diluted earnings per common share for the years ended December 31, 2024 and 2023, were $0.35.
In addition, gross profit was adversely affected in 2025 as a result of U.S. tariffs. Net income as a percentage of net sales was 6.0% for the year ended December 31, 2025, compared to 6.8% for 2024. Basic earnings per common share for the years ended December 31, 2025 and 2024, were $0.34 and $0.35, respectively.
Cash decreased by 8.5%, or $1,742,000, to $18,636,000 as of December 31, 2024, compared to $20,378,000 as of December 31, 2023, and working capital decreased by $2,982,000, to $47,516,000 from $50,498,000 as of December 31, 2023.
Cash decreased by 8.8%, or $1,648,000, to $16,988,000 as of December 31, 2025, compared to $18,636,000 as of December 31, 2024, and working capital increased by $946,000, to $48,462,000 from $47,516,000 as of December 31, 2024.
Net cash used in financing activities was $3,664,000 for the year ended December 31, 2024, compared to net cash used in financing activities of $3,578,000 for 2023.
Net cash used in financing activities was $3,379,000 for the year ended December 31, 2025, compared to net cash used in financing activities of $3,664,000 for 2024. Net cash used in financing activities for the year ended December 31, 2025, resulted from the payment of $3,345,000 for the repurchase of common stock and $34,000 for treasury stock excise tax.
Accounts payable and accrued liabilities as of December 31, 2024 increased by $325,000, or 17.1%, to $2,230,000, from $1,905,000 as of December 31, 2023. The increase was primarily due to an increase in trade payables and accrued payroll, partially offset by a decrease in accrued bonuses.
The decrease in the lease liabilities was the result of lease payments made during the period. Accounts payable and accrued liabilities as of December 31, 2025 increased by $863,000, or 38.7%, to $3,093,000, from $2,230,000 as of December 31, 2024. The increase was primarily due to an increase in trade payables of $722,000.
Consolidated sales for the year ended December 31, 2024, decreased to $57,840,000, from $61,232,000 for the year ended December 31, 2023, representing a decrease of $3,392,000, or 5.5%. This decrease consisted of decreased sales in the Building Supply segment of $4,431,000, partially offset by increased sales in the Disposable Protective Apparel segment of $1,039,000.
Consolidated sales for the year ended December 31, 2025, increased to $59,142,000, from $57,840,000 for the year ended December 31, 2024, representing an increase of $1,302,000, or 2.3%. This increase consisted of increased sales in the Building Supply segment of $66,000 and increased sales in the Disposable Protective Apparel segment of $1,236,000.
Our significant accounting policies and estimates are more fully described in Note 2 – “Summary of Significant Accounting Policies” in the notes to our consolidated financial statements in Item 8. Our critical accounting policies and estimates include the following: Accounts Receivable: Accounts receivable are recorded at the invoice amount and do not bear interest.
Our critical accounting policies and estimates include the following: Accounts Receivable: Accounts receivable are recorded at the invoice amount and do not bear interest.
As a percentage of net sales, selling, general and administrative expenses increased to 32.2% for the year ended December 31, 2024, from 29.0% for 2023. 19 The change in expenses by segment for the year ended December 31, 2024, was as follows: Disposable Protective Apparel expenses were up by $672,000, or 14.3%; Building Supply expenses were down by $505,000, or 6.6%; and corporate unallocated expenses were up by $672,000, or 12.5%.
The change in expenses by segment for the year ended December 31, 2025, was as follows: Building Supply expenses were down by $361,000, or 5.0%; Disposable Protective Apparel expenses were up by $47,000, or 0.9%; and corporate unallocated expenses were down by $524,000, or 8.6%.
Management expects growth with this distributor and in the housewrap category in the coming year, when uncertainty in the housing market is expected to abate. Sales of synthetic roof underlayment which were down double digits through the first nine months of 2024, ended the year down single digits.
Management expects continued growth in the housewrap category in the coming year, especially if uncertainty in the economy and housing market abates. Sales of synthetic roof underlayment were up 6.7% through the first nine months of 2025 but ended the year down 10.6%. This can be attributable primarily to two issues.
All revenue is recognized when we satisfy our performance obligations under the applicable contract.
Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring control of products. All revenue is recognized when we satisfy our performance obligations under the applicable contract.
As we progress into next year, the outlook suggests both challenges and potential easing of freight rates. Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $839,000, or 4.7%, to $18,611,000 for the year ended December 31, 2024, from $17,772,000 for the year ended December 31, 2023.
As we progress into next year, gross margin should improve as we deplete our higher tariffed inventory. Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by $838,000, or 4.5%, to $17,773,000 for the year ended December 31, 2025, from $18,611,000 for the year ended December 31, 2024.
LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2024, the Company had cash and cash equivalents (“cash”) of $18,636,000 and working capital of $47,516,000. As of December 31, 2024, the Company’s current ratio (current assets/current liabilities) was 16:1, compared to a current ratio of 21:1 as of December 31, 2023.
As of December 31, 2025, the Company’s current ratio (current assets/current liabilities) was 13:1, compared to a current ratio of 16:1 as of December 31, 2024.
Gross Profit. Gross profit increased by $104,000, or 0.5%, to $22,933,000 for the year ended December 31, 2024, from $22,829,000 for the year ended December 31, 2023. The gross profit margin was 39.6% for the year ended December 31, 2024, compared to 37.3% for the year ended December 31, 2023.
The gross profit margin was 38.1% for the year ended December 31, 2025, compared to 39.6% for the year ended December 31, 2024.
However, there continues to be uncertainty in housing starts and the economy in general that could affect this segment. Disposable Protective Apparel Segment Sales for the Disposable Protective Apparel segment for the year ended December 31, 2024, increased by $1,039,000, or 5.0%, to $21,875,000, compared to $20,836,000 for 2023.
Disposable Protective Apparel Segment Sales for the Disposable Protective Apparel segment for the year ended December 31, 2025, increased by $1,236,000, or 5.7%, to $23,111,000, compared to $21,875,000 for 2024.
The estimated effective tax rate was 21.8% for the year ended December 31, 2024, compared to 22.8% for the year ended December 31, 2023. The Company does not record a tax provision on equity in income of unconsolidated affiliate, which reduces the effective tax rate. Net Income.
The estimated effective tax rate was 24.4% for the year ended December 31, 2025, compared to 21.8% for the year ended December 31, 2024. The effective tax rate increase between 2025 and 2024, of 2.6 percentage points, was primarily due to lower equity in income of unconsolidated affiliate in 2025.
The increase was primarily due to an increase in equity in income of unconsolidated affiliate of $152,000, an increase in interest income of $96,000 and a gain on sale of assets of $30,000. Income before Provision for Income Taxes.
Other income decreased by $741,000 to income of $830,000 for the year ended December 31, 2025, compared to $1,571,000 for 2024. The decrease was primarily due to a decrease in equity in income of unconsolidated affiliate of $447,000, a decrease in interest income of $264,000 and a decrease in gain on sale of assets of $30,000.
Accounts receivable decreased by $1,651,000, or 25.2%, to $4,894,000 as of December 31, 2024, from $6,545,000 as of December 31, 2023. The decrease in accounts receivable was primarily related to decreased sales in the latter part of 2024 compared to the same period of 2023.
Accounts receivable increased by $3,244,000, or 66.3%, to $8,138,000 as of December 31, 2025, from $4,894,000 as of December 31, 2024. The increase in accounts receivable was primarily related to increased disposable garment and other woven material sales in the fourth quarter of 2025 compared to the same period of 2024.
After hurricanes Helene and Milton, we saw a surge in synthetic roof underlayment orders in the fourth quarter of 2024 to assist in the southeast rebuild. Sales of this product line continue to be affected by the uncertain economic conditions, more offshore competition and a push in the market to reduce product selling prices.
In addition, sales of our roof underlayment line continue to be affected by a push in the market to reduce product selling prices and more offshore competition. Despite all these factors, we maintained market share within the roofing product line in 2025.
Housewrap accessories consist of REXTREME Window and Door Flashing and REX™ Premium Seam Tape. The housing market continues to be weak, with housing starts down 4.4% in 2024 compared to 2023.
Housewrap accessories consist of REXTREME Window and Door Flashing and REX™ Premium Seam Tape. The housing market in 2025 proved to be a year of sustained challenges for single-family housing starts, which were down by 7.0% through October 2025 (the latest data available).
Income from operations as a percentage of net sales for the year ended December 31, 2024, was 6.0%, compared to 6.8% for 2023. Other Income. Other income increased by $278,000 to income of $1,571,000 for the year ended December 31, 2024, compared to $1,293,000 for 2023.
Gross profit margin was adversely affected in 2025 because of U.S. tariffs on products primarily from our joint venture partner in India. Income from operations as a percentage of net sales for the year ended December 31, 2025, was 6.5%, compared to 6.0% for 2024. Other Income.
The decrease was primarily due to decreased prepaid equipment and prepayments for insurance, partially offset by increased prepaid tax payments. Right-of-use assets as of December 31, 2024, increased by $3,904,000 to $8,714,000 from $4,801,000 as of December 31, 2023, primarily as a result of our new Nogales, Arizona lease, partially offset by amortization of the right of use asset.
Right-of-use assets as of December 31, 2025, decreased by $939,000 to $7,775,000 from $8,714,000 as of December 31, 2024, as a result of amortization of the right of use asset. 20 Lease liabilities as of December 31, 2025, decreased by $893,000 to $7,882,000 from $8,775,000 as of December 31, 2024.
Although sales of the core building products (housewrap and synthetic roof underlayment) were down 7.9% in 2024, which exceeds the decline in housing starts, a closer look reveals the issues we faced.
With that said, in 2025 we outperformed the market as our core building products (housewrap and synthetic roof underlayment) were down 3.7%, as compared to the 7.0% decrease in single-family housing starts. Housewrap sales in 2025 outperformed the broader market by nearly 10%, with an increase of 2.3% despite a 7.0% decline in single-family housing starts.
Removed
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.
Added
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis together with our consolidated financial statements and the notes to our consolidated financial statements, which appear elsewhere in this report.
Removed
These and many other factors could affect the Company’s future operating results and financial condition and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by the Company or on its behalf.
Added
Our target markets include construction building supply and roofing distributors; companies in pharmaceutical manufacturing, bio-pharmaceutical manufacturing, medical device manufacturing, lab animal research, and high technology electronics manufacturing (which includes the semi-conductor market); and medical and dental distributors.
Removed
President Trump has indicated that his administration is likely to impose significant tariffs on imported goods, including a 60% tariff on Chinese imports, a 25% tariff on goods from Canada and Mexico and up to 10% or 20% on all other U.S. imports.
Added
Demand for new homes has dropped due to economic volatility, high interest rates, and uncertainty surrounding housing starts. Increased tariffs have created notable pricing and supply volatility within the market. In addition, declining builder confidence and ongoing price volatility have resulted in reduced inventory positions among our primary customers.
Removed
Excluding the decline of sales to two private label distributors, which were beyond our control, the 2024 sales performance of our core building products would have resulted in a lower percentage decline than the reduction in housing starts, indicating that we otherwise outperformed the market.
Added
In 2025, due to the economic climate in the building industry, there was pricing pressure on this product line, which affected overall sales. This performance was driven by our reputation for product quality, breadth of offerings, and system warranty programs, which delivered market share improvement among existing customers and facilitated expansion into developing geographic regions and end-market applications.
Removed
In addition, the percentage change in sales for all of 2024 improved slightly over the first nine months of 2024.
Added
First, the Asphalt Roofing Manufacturers Association reported a steep decline in shipments of 27.9% in the fourth quarter of 2025 compared to the same period of 2024. In addition, the association reported a 10.3% decline during 2025 compared to the prior year.
Removed
Synthetic roof underlayment sales in the fourth quarter of 2024 exceeded sales in the same quarter of 2023. 18 Housewrap sales were encouraging through the first nine months of 2024 especially since the percentage decline of housing starts was higher than the percentage decline of housewrap sales.
Added
Secondly, a stronger than normal hurricane season in the fourth quarter of 2024 caused the results to be lower for this segment in the fourth quarter of 2025 and for the year. After hurricanes Helene and Milton in late 2024, we experienced a surge in synthetic roof underlayment orders in the fourth quarter of 2024.
Removed
Lower housewrap sales in the final quarter of 2024 were primarily due to one of our larger distributors losing some end user’s business but we have not lost share with this distributor. Presenting an additional challenge in 2024, multi-family housing starts in 2024 were down 11.3% compared to 2023 with 2024 being the lowest in ten years.
Added
Our domestic inventory position, customer expansion efforts, and continued investment in builder and contractor relationships mitigated the impact of market contraction, allowing us to meet customer demand while maintaining competitive positioning. We are exploring additional products in the roofing market and expect growth in 2026 in the synthetic roof underlayment category.
Removed
We launched our new line of self-adhered roofing products in late 2023 and have achieved revenue in 2024, and we expect continued growth within our current customer base and into new markets. We are exploring additional products in the roofing market and expect growth in 2025 in the synthetic roof underlayment category.
Added
Sales of other woven material sales increased by $976,000, or 28.9% in 2025 compared to 2024, primarily due to increased sales to our largest customer for this product line. The Company is pursuing new opportunities for other woven material in 2026 that could improve sales. 18 The building industry forecasts for 2026 remain somewhat conflicted with many being cautiously optimistic.
Removed
Despite the challenges faced in 2024, our efforts are now focused on builders and contractors and we are educating the industry on our extensive manufacturing capabilities which are expected to contribute to future growth. Our top fifteen accounts have increased compared to 2023, excluding one of our top accounts mentioned above.
Added
This optimism is fueled by hopes of further interest rate reductions coupled with builder incentives such as price concessions or mortgage rate buydown assistance that would result in improved home affordability.
Removed
This is a testament to the hard work and commitment of our sales team. Late in the year, we added two Territory Mangers who will assist in strengthening relationships with our customers and driving new business. We also created the position of Director of Product and Business Development.
Added
Management remains committed to production and development of industry leading products and expects growth in the Building Supply segment in the coming year, however uncertainty in housing starts, tariffs, interest rates and the economy in general could negatively affect this segment.
Removed
This role will be instrumental in helping APT expand its product offerings and explore new opportunities and industries where we currently do not have a presence. Sales of other woven material sales decreased by $1,326,000, or 28.2% in 2024 compared to 2023, primarily due to one of our customers being acquired by another company.
Added
Sales of disposable protective garments, which comprise approximately 90% of the segment, were up 12.2% in 2025. Sales started gaining significant momentum in the third quarter and continued very strong in the fourth quarter of 2025. Sales of shoe covers, lab coats, frocks, gowns and caps all grew in 2025 compared to 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed4 unchanged
Biggest changeWe do not expect any significant effect on our consolidated results of operations from interest or currency rate fluctuations. We do not hedge interest rates or foreign exchange risks. Alpha Pro Tech, Ltd.
Biggest changeWe do not expect any significant effect on our consolidated results of operations from interest or currency rate fluctuations. We do not hedge interest rates or foreign exchange risks. 21 Alpha Pro Tech, Ltd.

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